As the end draws near, more problems continue to plague the entrants. EADS is offering a design that didn’t meet DAPA’s initial requirements, Boeing hasn’t released or shown a fully-realized F-15 SE, and now Lockheed Martin’s F-35 price tag may have exploded beyond DAPA’s expectations.

With Boeing’s F-15 SE, we’re at a loss for credible data, since the product has yet to actually exist, but we can look at previous F-15 K sticker prices, while citing sources deriving estimates for a potential F-15 SE. South Korea’s F-X II program’s F-15 Ks came in at US$100 million each and the F-15 SE has been estimated to cost a similar amount per unit. Doing some basic math, we’re looking at about US$6 billion for a sixty plane order. Adding logistics support services, spare parts, and cost inflation, the F-15 SE will still tentatively fit into DAPA’s US$7.4 billion budget.

EADS’s Eurofighter falls into ranges between £64-£84 million per unit, varying from source to source. If we take both ends of that figure, convert them into US dollars (about 116 million) and multiply the results by Korea’s sixty plane order, we’re in the range of US$6.1 to US$8.1 billion, still playing in DAPA’s relative ballpark.

For the best look at Lockheed Martin’s F-35 costs, sales negotiations with Japan have revealed an overall price of US$238 million per unit. While this cost relates directly to expected sales with Japan and includes various bells and whistles reflective of that specific deal (extra engines, performance based logistics, etc), they are features that South Korea would also potentially require to maintain their new purchases’ combat viability. Sixty units would double DAPA’s estimated expenditure, at around US$14.3 billion for total acquisition.

These are obviously rough estimates, and the Eurofighter and F-15 SE could easily see higher costs than the above projections. Unfortunately, inflation and additional technologies will not result in double the expected/estimated prices. Either DAPA will pay a lot more money than they’re expecting, Lockheed Martin will cut the price of their F-35 in half (making Japan look foolish), or Boeing/EADS will walk away with a sixty plane order in June.

My money’s on the latter, and I remain convinced that Boeing will walk away a winner.

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Craig was born & raised in the United States, having recently returned there after over five years in Asia. He is currently pursuing further education in the realms of East Asian Studies and Politics. Craig is an avid fan of the political, economic, and military machinations occurring throughout the Asian continent and how those turning gears affect the rest of the world. He's currently covering both North and South Korea for Asia Security Watch, enjoying shedding light on to this far-too-often ignored slice of Asia.
Craig Scanlan has 82 post(s) on Asia Security Watch

7 comments

I would agree to the point that I was thrilled to hear that the Russians were going to offer and the SKs were willing to at least think about buying PAKs. Then Russia withdrew its offer, a decision that can be interpreted multiple ways, but nevertheless is IMO a real loss for Korea.

You're not making an apples to apples comparison between the F-35 and the F-15SE. The fly away price of $100 for the SE does not include services… otherwise its flyaway price would be $30~$40 million, at the least.

The current F-35A lot unit prices are $118 million for F-35, with it declining to about $90 million or so around 2016 (and $75 million by 2020.) Japanese contract contains the service contract and training costs factored into the price for the next 20 years or so (if memory serves me), which is the reason behind the apparent cost discrepancy.

On a broader level, the F-35 is a cheaper option than the F-15 and Eurofighter. As a heavy twin engine fighter with two seats, the Silent Eagle will cost more to operate than the F-35 (that's particularly true given the JSF's Performance Based Logistics maintenance model.) The service costs of the Eurofighter are known to be very high as well.

Not according to Exhibit P-40. On Feb 2011, the USAF promised the world that in 2016, the "Flyaway Unit Cost" is ~90 million and IIRC on that other chart you recommended Non-Recurring Flyaway Unit Cost are ~$10 million off. In Feb 2012, the new Exhibit P-40 says that in 2016, the Flyaway Unit Cost will be $111 million. I cannot see how I'm supposed to interpret this as anything but a massive increase.

The part about it being "20 years" is new. It definitely was not in the announcement the US handed out about that $10 billion dollar deal. If that's right, given the cost of the plane, a ~1:1 between the plane's cost and maintenance for 20 years AFAIK is not unreasonable, but I suspect the J-MoD would have been happier if the US delayed announcing the massive cost until later when they can discuss it out of public scrutiny.

And I thought Performance Based Logistics is becoming the norm these days?

The USAF budget document is not the best way to view the pure flyaway (reoccurring flyaway), because it adds in extraneous costs (Non-reoccurring and ancillary equipment.) Manufacturers generally state flyaway in the public domain as without them (certainly that's what Boeing does with their F-15SE). There are variances in the costs and its not an exact comparison in any way (base year is a big one). However even with a rough apples to apples comparison makes it pretty clear that the F-15 is a more expensive aircraft, particularly after 2018.

The DoD's Selected Acquisitions Review offers this on Page 38 of the December 2011 document:

Basically for 2012 divide $2041.5 (million) by 18 aircraft gives you $113 million per aircraft. For 2016 DoD predicts $80 million for the F-35 in 2016 not $90 million. Typically the cost has been running about 7~10% above estimates in the last few years, which should be factor into the 2013 and later estimates.

Re: 20 years.

As I stated in my original post, I wasn't too sure it was for 20 years, but if its for 30 (average service lifetime) then that just increases the amortization for the support side of the contract. Its not an all-in contract however. It offers the depot level sustainment, training and a few other ancillaries. Flight line maintenance, parts, fuel, personnel, ect are not included in this FMS. And yes, to directly rebut Mr Scanlan's point, adding in like service costs for the F-15 will easily double its overall contract.

PBLs are becoming more common, but most of the aircraft they are being applied to are not designed with such a service approach in mind. In particular the Autonomic Logistics Information System is a critical component that distinguishes. F/A-18's Automated maintenance environment is similar, but this is a more advanced form of this. First of it will allow the OEM to collect far more statistical information about the usage of F-35s, allowing for better modeling for parts and maintenance management. It also allows them to match the actual airframe usage to its maintenance needs. ALIS follows commercial airlines practices developed over the past decade. Status updates can be sent in flight or on the ground for real-time maintenance. Fleet management can be more efficiently tailored to each aircraft, reducing waste of having to carry everything for each contingency. Its probably one of the most critical parts to reduce the F-35's overall costs, though it is still immature at this time.

[…] price advantage in competition with the F-35A. Though the F-15SE does not actually exist yet, the New Pacific Institute estimates by looking at previous F-15 K sticker pricesthat a sixty plane order would cost $6 […]

[…] price advantage in competition with the F-35A. Though the F-15SE does not actually exist yet, the New Pacific Institute estimates by looking at previous F-15 K sticker pricesthat a sixty plane order would cost $6 […]